Homeowners on Mississippi’s Gulf Coast face another insurance rate hike in Hurricane Katrina’s aftermath.
Mississippi insurance regulators this week approved a statewide rate increase of 29 percent for Allstate homeowner policyholders, the Northbrook, Ill.-based insurer announced Wednesday. The company, in a written statement, attributed the hike to the “increased costs of doing business in Mississippi due to the heightened risk of catastrophes.”
Allstate also said Wednesday that it will resume writing new homeowner policies in Mississippi’s six southernmost counties for the first time since February 2006, but the policies won’t include coverage for wind and hail.
Starting May 21, coastal Mississippi homeowners will be able to purchase Allstate policies for fire, theft and liability coverage, but only if they have had an Allstate auto policy for at least 60 days.
The company says it will help coastal customers purchase wind and hail coverage through the state’s wind pool.
“As a major provider of insurance in the state of Mississippi, we feel it is important to take steps that help ensure we are in a position to continue to help protect as many of our customers as we responsibly can,” Allstate field vice president Ron Corbin said in a written statement.
The state Department of Insurance approved the statewide average rate increases of 29.5 percent for Allstate Insurance Co. and 29.6 percent for Allstate Property and Casualty Insurance Co. The new rates take effect on May 21 or upon renewal of a policy.
“We did not make this decision lightly,” Corbin said in his statement. “We understand the hardships our Mississippi customers have suffered during Hurricane Katrina and in other storms and catastrophes. We must charge rates that reflect the risk Mississippi faces every year.”
Also Wednesday, Allstate said customers who build homes according to guidelines set by the non-profit Federal Alliance for Safe Homes can get their Allstate wind and hail coverage reinstated.
Allstate was Mississippi’s fourth-largest homeowner insurer as of the start of 2005, according to Mississippi Insurance Commissioner George Dale’s office.
In February, State Farm Insurance Cos., the state’s largest homeowner insurer, suspended writing new homeowner and commercial policies in Mississippi. At the time, a State Farm spokesman said the decision was due in part to the wave of litigation the company has faced since the Aug. 29, 2005, storm.
Like State Farm, Allstate has been sued by hundreds of Gulf Coast policyholders whose claims were denied after Katrina. On Monday, a federal jury in New Orleans awarded more than $2.8 million to a Slidell, La., homeowner who sued Allstate for refusing to pay for most of the damage to his home. It was the first jury verdict in federal court for a Louisiana homeowner’s Katrina insurance suit.
Was this article valuable?
Here are more articles you may enjoy.